In a divorce settlement, it is common for both parties to focus on immediate financial concerns. Yet it is the long-term financial consequences of divorce that frequently are more devastating. Here are some of the most common concerns and how to avoid them.

Taking the house. The spouse who will have custody of the children typically wants to keep the family home. While this may be desirable emotionally, it can be financially problematic.

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A home is an illiquid asset that costs money to pay for and maintain. The parent with the children may not have the income resources to take care of both the home and the children, particularly if they give up other financial resources in return for the house. Consequently, it may be better financially to sell the home, purchase a more suitable residence, and split the balance.

Assuming equal is equal. The family home is a good example of the “dividing things down the middle.” Frequently, one person takes the house and the other keeps the pension and retirement account. Say both are valued at $400,000. The home is a cost-burden, while the retirement account is a liquid asset that can continue to grow tax deferred, probably at a faster growth rate than the home.

Not examining earning potential. Often one spouse has minimized a career in order to raise children. The settlement needs to take this into account, perhaps by providing extra money to the homemaking spouse to pay for additional career training or education.

Not thinking about taxes. Say it is proposed that one spouse keeps a $150,000 individual retirement accounts and the other keeps a $150,000 taxable investment account. Sounds fair. But it is not. The owners of the IRA will have to pay taxes on the money when it’s withdrawn at higher ordinary income rates while the other pays at capital gains tax rates on the investment gains as the assets are sold.

Not following through with your attorney on the QDRO. A spouse who will be receiving part of his or her spouse’s qualified retirement accounts will need a court order called a “qualified domestic relations order.” To avoid mistakes here make certain the attorney is aware of all retirement accounts and examine each plan for their rules regarding QDROs. Have the QDRO pre-approved by the plan before the settlement is final and start early in the approval process. Consider any available survivor benefits in the process.

Not insuring a divorced spouse. If you will be relying on your ex-spouse for any financial benefits take out a life insurance policy on your spouse to ensure the money will be there when the time comes. You should own the policy, so you know the premiums are paid. And buy the policy before the settlement becomes final so you know the spouse is insurable.

Finally, include your accountant and financial planner in the discussions as well as your attorney. That way long range ramifications can be thoroughly thought through and discussed before the divorce is final.